So, what’s the trouble ahead? Was sell-off Tuesday a sign of a severely overbought market correcting (see McClellan Summation index below? Worries about a weak earnings? Is Greece crawling its way back to the forefront as the IMF and EU duke it out over another rescue (the IMF recent leak)? Do the so-called Panama Papers revelations indicate just scratch the surface of these issues? How about ongoing global economic weakness, including the U.S where Tuesday’s Trade Deficit indicated a downgrade to GDP ahead, (the Atlanta Fed downgraded U.S. growth to only 0.4%)? Oil prices declined sharply for re-linking previous correlations to stock market declines once again?And so it goes.Stock declines became sharp as the day wore on and any previous dip-buying wasn’t seen for the first time in weeks.So don’t feel too bad as there’s always Fed Minutes on Wednesday for bulls to find a kernel of information to drive stocks higher? Sure, at some point the world’s Central Bank policies will eventually become tiresome and lose their impact. Really? Um, maybe.Other market moving news was Obama’s threat to deny with more Executive action instead of offering policies to encourage companies with tax policies to would encourage them to bring the money home. The Allegan and Pfizer merger may be in doubt. Allegan is the largest holdings in the hedge fund space. Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day green may mean leveraged inverse or red leveraged short.

Volume was light and breadth per the WSJ was as negative as you might expect.

SPY 5 MINUTE

SPX DAILY

SPX WEEKLY

INDU DAILY

INDU WEEKLY

RUT WEEKLY

XLE WEEKLY

XLI WEEKLY

XLV WEEKLY

XLU WEEKLY

IYR WEEKLY

TLT WEEKLY

UUP WEEKLY

GLD WEEKLY

DBB WEEKLY

USO WEEKLY

EFA WEEKLY

IEV WEEKLY

EEM WEEKLY

NYMO DAILY

The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.

NYSI DAILY

The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended on an intermediate term.

VIX WEEKLY

The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation is highlighted in the chart above. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.

It’s about time we had even a small correction. All the while we’ve seen insiders sell and breadth declining as markets rallied. That’s a sign of weakness.

Earnings will be rolling out soon enough and those promise to be disappointing unless analyst’s lowered expectations are beat. Even so, earnings won’t be great.

The often odd Fed Minutes will be released Wednesday afternoon. What is it we don’t already know?

If you know the other and know yourself, you need not fear the result of a hundred battles.

Sun Tzu

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.